Growth, inequality and poverty in Vietnam: How did trade liberalisation help the poor, 2002–2008

Abstract

AbstractUsing the Vietnamese Living Standards Surveys for 2002, 2004, 2006 and 2008, we explore how provinces with differential access to trade liberalisation reforms differ in their pro‐poor growth performance in Vietnam. Using both non‐parametric and parametric estimation, we find strong, robust evidence of pro‐poor growth in provinces with greater exposure to trade liberalisation. Using censored and uncensored regressions, the study also shows that increased wages play a critical role in this outcome. Our analysis enables identification of the core mechanisms through which the poor materialise their gains from trade‐driven growth in a transition economy.